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Wednesday, October 06, 2010

NFL Armageddon 2011 – at the quarter pole, or on the eve of destruction

The National Football League season reached the quarter pole Sunday and most of the discussion has focused on the league’s on-field product. However, it appears more and more certain that once the Lombardi Trophy is hoisted at the Dallas Cowboys Stadium, moments after Super Bowl XLV, the focus will turn immediately to the labor negotiations between the league and the NFL Players Association.

NFL Players Association executive director DeMaurice Smith added fuel to the growing fire between the players and the owners earlier this week. When appearing in Green Bay with Packers quarterback Aaron Rodgers, he once again suggested NFL Armageddon is just around the corner.

Speaking at a tailgate-style fan luncheon organized by the NFLPA, Smith alluded to recent media reports that suggest the NFL is requiring banks that lend money to its teams to extend grace periods for loan defaults through the end of the 2011 season in the event of a lockout.

"That to me is a step where the owners are protecting themselves in the event that there is no season," Smith said.

NFL spokesman Greg Aiello shot right back suggesting what the NFL is doing is nothing more than the league doing what it believes it has to do to manage its business affairs.

"There are many preparations taking place, including the union preparing to decertify and go out of business," Aiello said. "Our focus is on negotiating a new agreement with the union. The longer it goes, the tougher it will be and we are not sure if this union plans on continuing to be a union."

For a head office that is determined to avoid a work stoppage, the NFL continues to send out a mixed message to both the NFL and the Players Association. At the same time the Players Association continues to deliver an equally confusing message when it comes to a new collective bargaining agreement.

Two weeks ago Jay Glazer of FOX broke the news that the NFL head office has a plan in place for an eventual work stoppage. If you’re glass is half full, the league is making the prudent business move, if you’re glass is half empty the league is sending a message that labor war is upon is.

According to Glazer the three-phase plan begins in April, with a pay cut for Commissioner Roger Goodell and senior-level employees. The second phase would come a couple of months later, with "the majority" of league employees taking two unpaid furloughs. Phase three would involve larger-scale pay cuts and salary freezes.

NFL spokesman Greg Aiello explained the situation in a statement released to the media,"Our employees are aware of both of the strident comments coming from the NFLPA leadership for more than a year and the union's current actions to position itself to decertify and go out of business," Aiello said.

"Our employees want to know what we would do if despite our best good-faith efforts, no agreement is reached. Our primary focus remains on negotiating a new agreement."

The players team by team, player by player are voting to decertify the NFLPA, a tactic players used in 1987.

The NFLPA went on strike for a month in 1987. On this occasion, however, they only succeeded in cancelling one week of the season. For the next three weeks, the NFL staged games with hastily assembled replacement teams. They were made up of several players cut during training camp, as well as a few veterans who crossed the picket lines. The television networks showcased these games as if they featured players of the same quality as the veterans who were out on strike. Many of the league's owners had anticipated a strike and had put replacements on standby for $1,000 per game.

However, the NFLPA failed to set up a strike fund to cover lost salaries. Fearing that the owners would cut off their annuities, 89 players crossed the picket line. Among the most prominent players to immediately cross the line were New York Jets defensive end Mark Gastineau and Dallas Cowboys defensive tackle Randy White. San Francisco 49ers quarterback Joe Montana and Seattle Seahawks wide receiver Steve Largent later joined the replacement players and other strike-breakers.

Faced with cracks in union support, the willingness of the networks to broadcast the replacement games and hostile public sentiment, the union voted to go back to work on October 15, 1987 without a collective bargaining agreement. They had to wait another week to get back on the field, however, since they had not come back by the owners' deadline. The union filed a new antitrust suit that same day.

The Court of Appeals ultimately rejected that suit on the ground that the labor exemption from antitrust liability protected the employers, even though the union was no longer party to a collective bargaining agreement that would have permitted the practices that the union was challenging. In response, the union formally disclaimed any interest in representing NFL players in collective bargaining and reformed itself as a professional organization in 1989. Having done that, the following year union members, led by Freeman McNeil of the New York Jets, brought a new antitrust action against the NFL challenging its free agency rules as an unlawful restraint of trade.

The players ultimately prevailed after a jury trial on their claims in that action. That verdict, the pendency of other antitrust cases and the threat of a class action filed by Reggie White, then with the Philadelphia Eagles, on behalf of all NFL players brought the parties back to the negotiating table. They finally agreed on a formula that permitted free agency. In return, the owners demanded and received a salary cap, albeit one tied to a formula based on players' share of total league revenues. The agreement also established a salary floor - minimum payrolls all teams were obliged to pay.

NFL Commissioner Roger Goodell has been critical of the NFLPA’s plans to decertify the union and what it would represent to the labor talks.

"If there is no union who you negotiate with, that is an issue," Goodell said, according to various media reports. "They have to determine whether they are a union or not a union."

On June 9 the NFLPA filed unfair labor complaint against the NFL and its owners claiming that the language in the leagues television contracts acts as a form of lockout protection for team owners, guaranteeing them revenues even if football isn't played in 2011.

The NFLPA (as Goodell alluded to the group that wants to be a union some days but not on other days) wants the $4 billion the league receives in television revenues placed in escrow until a new collective bargaining agreement is finalized.

"If it is the case that networks have obtained digital rights or other media rights for free in exchange for a promise that the full (TV) funds be available to teams even if games are not played necessarily means they left revenue on the table," Smith said during a conference call. "If there are facts from which a reasonable person can conclude they undertook these agreements with the idea of gaining bargaining advantages, the players would argue that would specifically be in violation."

When asked about the league's contention that the contract language is unchanged and money the networks lost through a lockout would have to be repaid, Smith replied: "We'll find out in discovery."

The NFL responded to the union's complaint with the following statement: "The television contracts that the union attacked today were agreed to during the worst economy in our lifetimes. Far from failing to maximize revenue, the contracts grew league revenue to fund higher player salaries and benefits. No wonder DeMaurice Smith said publicly this year, 'My hat's off to Roger Goodell. Television is locked up until 2014 to the tune of about $5 billion a year.' The union's meritless charges, including many inaccuracies, will be addressed in the proper forum, but they are simply a distraction and do nothing to get us any closer to a new CBA."

League counsel Jeff Pash told NFL.com that in the event games were cancelled in 2011, the league would have to repay the networks. That negates any report that the NFL has their money in the bank.

Does a work stoppage make any sense? Of course not but there are forces at work here (issues that need to be negotiated by both parties and bargaining in good faith.)

Still as Fox broadcaster and Super Bowl winning coach Jimmy Johnson mentioned on Fox’s NFL pregame show this past Sunday, the forecast is not very bright right now when it comes to the impending NFL Labour Armageddon.

“To me, today’s collective bargaining debate between the owners and the players is just so simple. Common sense needs to prevail,” Johnson said.

“As opposed to the movie, greed is not good. The owners are making millions. A lot of the players are making millions. Life is good in the NFL,” Johnson continued. “Our sport is at an all-time high in popularity. Why should we have a lockout or work stoppage? Last week, Howie [Long] spoke out against an 18-game season, a big sticking point. But to me, this is no different than a company asking its workers to put in a little overtime to keep the company strong. But for the players’ safety and overall health, the owners should guarantee that they will add more jobs.”

“The owners want a rookie pay scale,” Johnson added. “Now this makes total sense. Why should the teams continue to pay unproven rookies big bonuses when some of them never contribute? Why should some picks like JaMarcus Russell leave the game with $31 million? Both sides have to agree that money is better spent on veterans. Just imagine if that $31 million was spread among every Raider starting today. If the owners get an 18-game schedule and a rookie wage scale, the players’ percentage of a bigger pie may be smaller, but their paycheck will be higher, so everyone should be happy.”

“Here is an idea for the owners and players union: don’t wait on getting a deal done, because the closer we get to a work stoppage, NFL sponsors will pull back, and everyone will lose money,” Johnson concluded. “Commissioner Goodell: Let your lasting legacy be compromising with the players, thus guaranteeing the fans and me that we can enjoy the NFL next September.”

For SportsBusinessNews.com this is Howard Bloom. Sources cited and used in this Insider Report: Wikipedia, NFL.com

About Me

The evolution of Howard Bloom’s career took a dramatic change in the spring of 1997, when Howard began publishing SportsBusinessNews.com. In its fifteen years, SBN has evolved into the largest and one of the most influential sports industry publications.